It's been a while since I blogged here. I plead guilty to taking on too many commitments. The other problem was logistical - I have blog and podcast feeds in many locations and started to feel too spread out. I solved that part of the problem by uniting all my feeds into one "Master SAP Blog and Podcast Feed" on Feedburner, which required a lot of geeky fun with Yahoo pipes, so feel free to hop onto that feed. With that solved, I'm going to try to blog here at SAP Toolbox more often also.

There's no better way to get back on track with this blog than on an issue that matters a great deal to SAP customers right now: the cost of SAP support. A little while ago, I received an email from IT Toolbox about a new survey on customer attitudes on SAP support. The survey was conducted by Panaya, a third party software firm in the SAP ecosystem that offers SaaS-based tools to streamline SAP upgrades and the implementation of SAP support packs. You can get your hands on a copy of this free SAP support survey in PDF format by filling out a short sign up form.

Some of the survey results were pretty surprising to me. In this blog post, I'll review some of the survey highlights. Since this blog is geared towards SAP skills and careers, I'll sprinkle in some skills tips, and I'll close with a few comments on the skills aspects of SAP support. Before I dive into the survey, I want to say a word about data. To me, good data is one of the most important contributions a firm or blogger can make to an SAP debate and I'm always on the lookout for more of it. When you think of some of the hot button issues in the SAP community, whether it's SAP certification, SAP support, or SAP versus SaaS, there is a lot of noise out there. The huffing and puffing doesn't always advance the conversation, but good data does.

There are some voices in the IT Toolbox that have advanced some of these discussions. Eric Kimberling of Panorama Consulting, one of the best sources of objective data on ERP versus SaaS and other ERP purchasing factors, posts on these topics frequently in his IT Toolbox blog. If you want more insight into Eric's data on attitudes towards SAP specifically, I recently issued a podcast with Eric on JonERP.com that looked at SAP implementation trends and SAP project success factors.

On the SAP certification front, Andy Klee of ERPtips just posted a great piece on his SAP training blog here at SAP Toolbox. What made Andy's contribution so worthwhile is that he did the hard work of primary research and in my view definitely advanced that particular conversation.

Meanwhile, for the hot button issue of SAP support, Panaya has done a good job of gathering data on customer attitudes. Their survey sample was not huge - 179 responses from customers and partners - but that's just enough to know that we are getting a useful window into customer perceptions.

Here's some of the topics addressed in the survey:

What is the average SAP IT support cost per user?
How much of it is incurred as in-house costs and how much is outsourced?
What are the top SAP IT support-related challenges?
What are SAP customers' opinions on SAP's latest Enterprise Support program?

Overall, the survey is 18 pages long with 100+ metrics and 25 charts, so I can't reproduce the effect of it here in this blog, so I'll focus on a few highlights that surprised me.

First off, Panaya estimates the cost of SAP developed and support across the organizations surveyed at $5,670 per user, per year. Given the emphasis that both SAP and Oracle place on support revenues in their quarterly earnings report, this number is not a surprise. Panaya calculated this by adding the total internal and outsourcing cost of an SAP implementation, and divided it by the number of users. This kind of number gives a good idea why support costs, and more importantly the need to justify the value of the support investment, has become an issue for all ERP users and a major reason why SaaS has established its current level of buzz in the ERP community.

70 percent of this per user cost still goes to on site users, with 30 percent going to outsourcing (it would be interesting to see if Panaya does another such survey in a year or two and tracks the increase or decrease in outsourcing costs). Not surprisingly, overall cost of support was cited as the top support-related challenge by 70 percent of those surveyed.

Another interesting issue is that of the "SAP support pack installation," which is not necessarily a routine process for SAP users. Those surveyed cited on average 73 person days per support package, with 42 days of that associated with testing.

But of course the spiciest information pertains to Enterprise Support, SAP's new support offering that was rolled out with such a degree of controversy. Not surprisingly, the majority of those surveyed (68%) did not think that the price increase of SAP support was reasonable (the original price increase being a maintenance increase from 17 to 22 percent).

Personally, I found that number to be a bit low, because that meant 32% of those surveyed were either supportive of the price increase or neutral towards it. I would have expected the level of negativity around the price increases to be higher. What this number tells me is that if SAP does a better job of communicating the value of Enterprise Support from here on out, and more importantly, if SAP continues to collaborate with its user group representatives at SUGEN to carefully measure support value before increasing support fees, SAP just might be able to pull out of what seemed at one point to be a debacle in pretty good shape.

The full story of how SAP got into hot water with its original Enterprise Support announcement and how it has started to turn the story around through user group collaboration is beyond the scope of this blog, but if you want a very recent update on the status of the "SUGEN KPIs," here's a recent link. The short version is that the first of the KPIs jointly established by SAP and its user group representatives (SUGEN) is now being measured, and there should be more information on the progress of measuring this first KPI (for CPU utilization and storage performance) in the fall. This KPI is the first in a group of 11 that SAP and SUGEN have established that will eventually be measured. There is quite a lot riding on these KPIs: SAP has agreed not to raise its maintenance fees to 22% unless it meets the agreed-upon KPI measurements.

So, while we review these Panaya support survey results, we have to keep in mind that the issue of SAP support is a moving target, and customer attitudes towards Enterprise Support in particular may change again, for the better or for the worse, based on how SAP follows through with its SUGEN/KPI collaboration and whether the KPIs developed really show customers the value they are getting. We would also need a larger survey sample size to make any definitive statements about Enterprise Support sentiment.

From an SAP skills perspective, the Panaya support study is also useful: there is data indicating the degree of usage of various SAP modules and solutions. For example, of those surveyed, 81% are now running NetWeaver components, with BW/BI being the most commonly used (83%). The first thing we can draw from this data is that any SAP technical person not fully immersed in SAP NetWeaver is falling out of relevance quickly. But I am often asked which NetWeaver components are in most demand. This survey has BW/BI out in front with NetWeaver XI/PI at 47% and NetWeaver Portals at 43%. I was a bit surprised the XI/PI number was so high, which tells us something about the acceptance of SAP's integration tools amongst those surveyed.

More interesting skills data: 43% of those surveyed are running SAP's industry solutions. Given how aggressively SAP pushes these solutions I found this number a bit low, but it wasn't totally out of range of what I would have predicted. I was not surprised to learn that FI and CO were the most common modules used (95% for CO and 98% for FI), but SAP's HR usage according to this survey was at 70%. That's a pretty decent number considering that SAP came to the HR party a bit late and many shops were already entrenched in other solutions by then. I would have liked to see some numbers on Business Suite product usage (CRM, SRM, etc) - maybe a topic for a future survey.

Well, I want to wrap this blog entry soon but there is plenty of data on the implementation of support packages I haven't had a chance to get into, and also some information on enhancement packages. The enhancement pack info is useful because there isn't much data yet on how customers are utilizing ECC 6.0 enhancement packs. The biggest difference between the two? 51% of those installing enhancement packages cited "understanding the new functionality" as one of their top two challenges. Assessing the impact of the enhancement packs on the existing solution was a close second (47%). This is where tracking data can really help you from an SAP career perspective. Does it make sense to be a consultant that has expertise in how enhancement packs impact the product areas you specialize in, from either an installation or functionality perspective? The answer from this data is unequivocally yes!

My final thought on Enterprise Support is that there is a definite skills tie in here as well. Enterprise Support is all about SAP making the case that there is indeed a much greater value to be derived from the "best practices" SAP has developed for monitoring SAP support issues from within Solution Manager. However, even SAP would concede that to accomplish this requires expertise in a new set of Solution Manager tools, as well as the Run SAP methodologies that provide a framework for post-implementation SAP support. For those who aspire to improve their skills and marketability, there is a lot to dig into here. And the best thing? You can be confident that the need for these skills will be there regardless of how the Enterprise Support debate pans out.

3 Comments

Thank you very much for this useful inforamtion. I agree wtih you and confirm that, from my experience in SAP support, Skills need good data which cant be gained by reading but by taking all aspects of support(from reading, commuincation, trsting, invistigation,knowledge share)

Regarding the implementation of support packages, if there is no suficent information and understanding of the impact of the implementation, a bad impact will hit the support service. I am sure of this and had live experiences.

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In this blog, I will share my assessments of the latest SAP skills and market trends and how SAP professionals can capitalize on them. The goal is to help readers keep their skills marketable as SAP evolves. I will also address common SAP career questions and dilemmas from blog readers.
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